- Hon Brooke van Velden
“Change has been a long time coming, and I know there are many who are frustrated with the Holidays Act. We need an Act that businesses can implement, and that makes it easy for workers to understand their entitlements. We need to do this once and do it right.
“I have heard from a number of businesses who are struggling to adjust to the previous Government’s decision to double sick leave entitlements for all eligible workers.
“Workplaces that rely on part-time workers are particularly vulnerable to unexpected staffing shortages. To explore this issue further, the exposure draft set for consultation will include a proposed approach to pro-rating sick leave, to better reflect how much an employee works,” says Ms van Velden.
“Although the previous Government spent many years working on a solution, the advice I have received from officials has led me to the conclusion that there are further opportunities to improve the simplicity and workability of the legislation. In some areas the previous Government’s decisions would end up increasing complexity and compliance costs.
For example, the exposure draft will now include a change in how annual leave is provided, moving from an entitlement system to an accrual system.
“Shifting to an accrual system for annual leave entitlements is just common sense. While workers might not notice any change in their entitlements, from a payroll perspective this should make a huge difference. An accrual system should help avoid the complex calculations that regularly stump payroll software and should therefore reduce compliance costs for employers.
To ensure the new legislation can be implemented across a variety of working arrangements, an exposure draft of the Bill will be released for targeted consultation in September 2024.
“I want to get feedback from stakeholders who will eventually have to work with the Act. We need the Act to be workable for everyone, from the multi-national corporates to the small-town family run restaurants.
“I believe it is important to hear from small businesses in particular, given small businesses will adopt a range of working arrangements and often do not have the same payroll infrastructure as larger organisations.
“My priority with these changes is to increase certainty and reduce complexity. This is about achieving sensible and workable legislation.”
For the Editors:
Stakeholders are encouraged to register their interest in being part of the targeted consultation with the Ministry of Business, Innovation and Employment (MBIE)
Website link:
MBIE will select a representative sample of organisations and individuals to consult with. In particular, targeted consultation is seeking the views of those who:
- have expertise in implementing the Holidays Act in payroll and business systems
- understand the impacts and outcomes of the Act for various groups of employers and/or employees.
